Question

A, B and C are partners sharing profits and losses equally. B dies. A and C agree to share future profits in the ratio of 7 : 5. Calculate the gaining ratio.

Answer 1

Old ratio = A : B : C = 1 : 1 : 1

B dies, so:

A's old share = `1/3`

C's old share = `1/3`

New ratio = A : C = 7 : 5

Gain of A

`7/12 - 1/3 = 7/12 - 4/12 = 1/4`

Gain of C

`5/12 - 1/3 = 5/12 - 4/12 = 1/12`

Therefore,

Gaining Ratio = `1/4 : 1/12 = 3 : 1`